Exporters face more red tape and costs as Brexit trade rules come into force

Exporters predict that new UK new customs controls on exports from the Republic to Britain will increase red tape and costs when they come into force next week.

From January 31st, UK customs will impose full controls on goods shipped to Britain from the Republic. The UK government flagged the move, delayed several times since the country left the European Union in 2021, last September.

British authorities’ demands will include declarations and notification of goods exported from the Republic, along with health certificates for live animals, meat and some other foods.

Simon McKeever, chief executive of industry body the Irish Exporters’ Association, said the changes would mean extra paperwork for many businesses, increasing their costs, while there were concerns about unforeseen problems as the new system beds in.

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“I think the larger Irish agri-food companies are fairly well prepared for this, but I think a lot of smaller companies are less ready,” he said.

McKeever noted that his organisation has been seeing big attendances at events it has run to outline the proposed changes to members, who in turn have plenty of questions about the new system.

The new rules will come into force from midnight on January 30th, so apply to anything shipped after that point.

They will not affect trade between the Republic and Northern Ireland, but they will apply to exports from the State to Britain, or those using the neighbouring island as a land bridge to Europe.

The change will hit huge numbers of businesses. Despite Brexit’s impact on trade patterns, the UK still accounts for about a third of exports, and it remains the biggest market for Irish food and drink sales abroad. The bulk of this share goes to Britain.

The Government calculated last week that beef exports to the UK hit €1.3 billion last year while the Republic sold €1.1 billion of dairy products there.

At a basic level, exporters’ customers or agents in Britain must register with, and make declarations to, the UK customs declaration system.

Hauliers will need the UK import declaration reference number to get a goods movement reference before departing for ports in the Republic.

British importers must notify authorities of high- or medium-risk products, which include live animals and meat, to the UK’s import of products, animals, food and feed system (IPAFFS).

Meat, live animals and some other food will require health certificates confirming that they meet British standards.

In the case of meat and live animals, Department of Agriculture, Food and the Marine vets have to provide this at the point of origin, which in most cases will be a factory or processor.

Consequently food exporters have to ensure they have organised this with local department staff.

McKeever said there were fears within the food industry that the department will not have enough vets to handle this work, although he acknowledged that they may not know for sure until they start applying the new rules.

While exporters believe introducing the new system is unlikely to go smoothly, McKeever points out that no one is panicking just yet.

He also believes that it will add to costs and cut competitiveness. However, he adds that members are more concerned about the likely impact of extra expenses closer to home, including Government plans to boost the minimum wage and employers’ social insurance payments.

Nevertheless, exporters face extra costs on the back of the customs changes. Fran Dunne, head of innovation with Irish Dog Foods, said the company had taken on three staff to manage the new system. “So there’s an obvious extra cost,” he added.

His company, which employs 350 people, exports about half its €80-million-a-year sales to Britain, where supermarkets including Aldi and Lidl sell it mostly under their own brands.

Dunne foresees plenty of issues for businesses selling their wares to Britain, including a lack of flexibility to deal with everyday problems.

Goods movement reference numbers must be notified to authorities 24 hours in advance, which means businesses have to operate at least “a day and a half” ahead to meet these deadlines.

This has implications for hauliers, whose vehicle registration numbers must be included with notifications of individual shipments.

Trucks break down or get punctures, Dunne pointed out, so this could create problems if the haulier has to replace one vehicle with another.

He pointed out that his company’s customers simply expect their orders to arrive ready to be sold at the agreed time, so the responsibility for handling all this rests firmly with the exporters.

Irish Dog Foods’ products do not need health certifications. However, Dunne said the UK had only recently updated the IPAFFS.

“That’s not a very good omen for what is going to happen on January 31st,” he said.

Dunne agreed there were plenty of things that could go wrong for businesses and hauliers as people adjust to the new controls.

The wrong paperwork or goods movement numbers could see trucks halted even at this side of the Irish Sea, he warned.

He also acknowledged that exporters face more paperwork and a potential loss of competitiveness. Businesses may have to pass some of the extra costs on to customers, but he added: “That’s a debate for another day.”

McKeever says that the problems encountered when the EU imposed its rules on trade with Britain in 2021, when Brexit finally became a reality, are still fresh in many people’s minds.

But he is keen to stress that Government and groups like his own have “stepped up the messaging” ahead of this latest change, and there is a sense, that larger businesses at least, are prepared.

Given that the system is new, the Government expects that the UK authorities are likely to focus on “education rather than enforcement” as businesses familiarise themselves with it.

According to McKeever, the Irish Exporters’ Association has also spoken to UK customs about making the new rules’ introduction as smooth as possible. “We hope that they do take a pragmatic approach,” he says.

Q AND A

What is happening and when?

The UK is introducing full customs controls on exports from the Republic to Britain on January 31st. The new rules come into force just after midnight on January 30th.

Who will be affected and how?

Any business selling products to Britain or using it as a land bridge to the rest of Europe.

What will businesses need to do?

Ensure their British customer or agent has registered with the UK Customs Declaration System and made a customs declaration.

What should hauliers do?

They need the import declaration reference number to get a Goods Movement Reference before they depart for ports in the Republic.

Are there special rules for food?

Live animals, meat and plant products classed as medium- or high-risk by UK authorities must get an Export Health Certificate. For meat and live animals, they must get this from an Irish Department of Agriculture veterinary officer. Exporters of these products must notify the UK’s Import of Products, Food and Feed System of each consignment.

Does this apply to all foods?

No, dairy products made from pasteurised milk are not considered high or medium risk.

Why is Britain doing this now?

This is one of the consequences of Brexit, which happened three years ago. The UK has been planning this since then, but postponed it several times.

Does this apply to Northern Ireland?

No, cross-Border trade remains unaffected in either direction, while there are no customs controls on trade between the North and Britain.

Why is Northern Ireland exempt?

The Irish border remains open under the Good Friday Agreement. Consequently, the North has access to both the British and EU single markets. A new deal, known as the Windsor Framework, which replaced the Northern Ireland Protocol, guaranteed this last year.

What happens if something is shipped from the Republic to the North and then processed there before export to Britain?

That will be treated as having been produced in Northern Ireland and is thus not subject to customs controls.

What has the Government here been doing?

Various departments, including Foreign Affairs, Agriculture Food and the Marine have been working to inform business of the changes in an effort to ensure they are ready.

Where can I find out more?

Traders can get information from www.gov.ie/brexit and by checking the UK government’s Border Target Operating Model website.